Legislature(2005 - 2006)CAPITOL 17
03/16/2005 03:15 PM LABOR & COMMERCE
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* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 33-EFFECT OF REGULATIONS ON SMALL BUSINESSES 3:52:16 PM CHAIR ANDERSON announced that the first order of business would be HOUSE BILL NO. 33, "An Act relating to the effect of regulations on small businesses; and providing for an effective date." REPRESENTATIVE LYNN moved to adopt the committee substitute for HB 33, Version 24-LS0239\L, Bannister, 3/14/05, as a working draft. There being no objection, Version L was before the committee. MICHAEL PAWLOWSKI, Staff to Representative Kevin Meyer, Alaska State Legislature, presented HB 33 on behalf of Representative Meyer, sponsor. He explained that Version L addresses the concerns of the committee. He turned to page 3, lines 21-22, and said, "While the process described in HB 33 doesn't create a grounds for traditional review of regulation, judicial review for unrelated provisions are still warranted under the existing administrative procedure." The second change is on page 4, line 2-3, which he explained excludes emergency regulations from the definition of regulation where it applies to this bill. The third change is on page 4, line 7, which changes the definition of small business to a business that employs fewer than 100 employees. 3:55:21 PM REPRESENTATIVE GUTTENBERG asked for clarification regarding a handout in the committee packet that illustrates the steps in the regulation adoption process under HB 33. MR. PAWLOWSKI explained that on the handout, anything that is not shaded is in the existing drafting manual for administrative regulations, and the shaded parts are what HB 33 would add. He noted that he underlined a few parts for emphasis. REPRESENTATIVE GUTTENBERG commented that he would like to know how easy it would be to comply with the changes made in the bill. CHRIS KENNEDY, Senior Assistant Attorney General, Environmental Section, Civil Division, Alaska Department of Law, replied: We agree with Representative Meyer that this process can be fitted into the regulatory steps the way he has outlined them, and that it doesn't present impossible logistical problems. Certainly ... it does add a step, and there is a cost to it in terms of involving the [Department of Commerce, Community, and Economic Development (DCCED)] in the process and so, we've addressed the cost in our fiscal notes, although those relayed to a slightly earlier version of the bill. But no, I don't think there's a concern that it makes an impossible addition to the regulatory adoption process. 3:59:46 PM CHAIR ANDERSON noted, "The drafting manual for administrative regulations isn't codified; it's an instructional list of elements and areas in which the regulation drafter can follow." Returning to the handout, he stated that the shaded portions indicate what would be codified. MR. KENNEDY agreed that the manual is not law, but is simply a guide. He said that the steps that are in the manual now are mostly prescribed by statute, and the shaded portions on the handout indicate the additional steps that would be prescribed by HB 33. 4:01:01 PM REPRESENTATIVE GUTTENBERG turned to the handout that lists the four things that the economic effect statement must provide, and he commented that numbers one, two, and four are common sense. However, he opined that number three, which says, "A statement of the probable effect that the proposed regulation would have on small businesses whose conduct would be governed by the proposed regulation," is a little problematic. He said that every small business is different, and he didn't see how to reconcile those differences in regulation. 4:02:04 PM MR. KENNEDY speculated that the statement of effect would be a page or two of "thoughtful discussion" that would be prepared by the particular department with the aid of the Department of Law and the DCED employee who would be assigned to manage the small business consultation. He noted, "I don't think the intent, as we read this bill, is to produce an elaborate study." REPRESENTATIVE CRAWFORD stated that the committee has heard past testimony that these things are already being done. He asked Mr. Kennedy if [the bill] is a useful exercise, and if there is a "good reason to put on more people and expend more effort to do this...?" MR. KENNEDY replied that the question may be getting into a policy choice that he may not be qualified to speak to. He commented: I can tell you that it's true that quite a lot of this process is already happening today in an informal way, and that's one of the reasons that it doesn't create an impossible burden. However, ... as we've said, it would add a cost and we're still discussing with the sponsor whether that cost is worthwhile in many contexts. ... We're concerned that this process really might not be terribly useful in the context of regulations, for example, that are only making technical amendments.... REPRESENTATIVE CRAWFORD asked Mr. Kennedy if it would be useful to reach a consensus on whether the bill is beneficial rather than moving it to another committee. MR. KENNEDY replied that the Department of Law doesn't have an objection to moving the bill to another committee because it feels that it is working well with the sponsor and making steady progress. REPRESENTATIVE LEDOUX opined that the bill appears to be an attempt to create a business-awareness in the regulatory process, and she asked why the bill is limited to small businesses. MR. PAWLOWSKI responded: Business-awareness in the regulatory process can add to the process and make the process better. That's the idea behind the bill. The idea in limiting it to a small business is that that's a focused area that ... you can make an actual effect. Large businesses, through the public comment process, often have people that they can devote to following regulations, whereas a small businessman who's just trying to do their job wakes up the next day and all of a sudden has to comply with a whole new host of paperwork that they never thought that they were going to have to do. But this puts someone in the process that looks out for their interest. CHAIR ANDERSON noted that the larger businesses not only have legal counsel and accountants but they also have associations that can defend their interests, whereas the small businessperson or the sole proprietor may not have that. 4:08:11 PM CHAIR ANDERSON added that he agreed with Representative Guttenberg regarding numbers one, two, and four, but commented that he didn't think number three was intangible or difficult. He stated, "I think that ... the need of the bill outweighs holding the bill in committee." 4:09:14 PM REPRESENTATIVE ROKEBERG moved to report [CSHB 33, Version 24- LS0239\L, Bannister, 3/14/05,] out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 33(L&C) was reported from the House Labor and Commerce Standing Committee.